To become self-reliant in battery cells, the government rolled out a `18,100-crore Production Linked Incentive (PLI) scheme for Advanced Chemistry Cells (ACC). While 40 GWh of battery cell capacity was awarded to beneficiaries, cell production has barely begun. Only Ola Cell Technologies, a subsidiary of Bhavish Aggarwal-led Ola Electric that won a 20 GWh allocation, has started commercial operations, with 2.5 GWh capacity. It plans to scale up to 6 GWh this year.<\/p>
Mukesh Ambani-led Reliance Industries, which bagged 15 GWh of cell capacity, has promised to complete its cell gigafactory by 2026. However, the conglomerate plans to assemble battery packs initially rather than getting into cell manufacturing. In its annual report, RIL said its Battery Energy Storage System (BESS) gigafactory is in advanced stages of commissioning with civil construction complete and equipment installation underway. Production is set to be ramped up through the second half of 2026, focusing on LFP (Lithium Iron Phosphate) chemistry for utility-scale BESS and mobility applications.<\/p>
The other 5 GWh was awarded to ACC Energy Storage, a subsidiary of Rajesh Exports, which has been under Sebi scrutiny for inflating revenues and rerouting funds. Due to delays, no cell maker has received ACC-PLI (Advanced Chemistry Cells- Production Linked Incentive) yet.<\/p>
India\u2019s two legacy lead-acid battery makers Amara Raja and Exide lost out on the ACC-PLI scheme but are moving ahead without government incentives.<\/p>
Amara Raja plans to invest `9,500 crore to set up a 16 GWh cell capacity in phases by 2030-31. \u201cOur first 2 GWh cell gigafactory is expected to be commissioned in June next year,\u201d says Vikramadithya Gourineni, executive director, Amara Raja Energy & Mobility.<\/p>
Gourineni admits that things have slowed down. \u201cWe are dependent on equipment suppliers outside the country. Qualified technicians are not able to easily come for installation and commissioning of equipment. It\u2019s a big challenge. It delays things quite a bit,\u201d he says.<\/p>
\u201cThere is a bit of policy uncertainty and conditions from China. There have been export controls and restrictions on technology access. Our own tech partnership has not gone ahead. It\u2019s become an in-house effort. There have been some stumbling blocks,\u201d he adds.<\/p>
India\u2019s entire lithium-ion cell demand is met through imports, making EV makers vulnerable to supply chain shocks.<\/p>
\u201cChina took decades to build this with substantial policy support and coordination across the value chain. We need to be faster than that. Every company needs to find its niche to focus within the value chain. You have to have companies that do raw material extraction, refining and components. There needs to be an end-to-end value chain, from materials to cells to packs,\u201d says Gourineni.<\/p>
While the government is helping the industry by driving downstream demand creation from schemes such as PM e-Drive, Gourineni says there is a need to mandate domestic value addition. \u201cLocalisation has to increase. If we are forced to compete with global economies of scale while we are just getting started, it will be difficult,\u201d he says.<\/p>
CV Manohar, Head of Cell Research and Development at Tata Group-owned Agratas, agrees. \u201cContinued localisation of supply chains and greater access to critical raw materials will play an important role in strengthening resilience and supporting long-term competitiveness,\u201d he says.<\/p>
Competing with China\u2019s overcapacity in battery cells is not going to be easy for Indian cell manufacturers. Even though Amara Raja is investing `9,500 crore, it has no clarity on the price its customers are willing to pay for the cells. \u201cMade-in-China prices are not realistic on Day 1,\u201d says Gourineni. \u201cWe are investing billions of dollars. If the customer is not going to pay a premium for a cell made in India, where industrialisation is just taking place, that\u2019s our biggest concern,\u201d he adds.<\/p>
\u201cI will have to charge a higher cost because my own industrialisation is just starting. If you add domestic raw materials to that, it all adds up,\u201d says Gourineni.<\/p> Lessons from ACC-PLI<\/strong><\/p> Clearly, the battery PLI scheme has not yielded results yet. \u201cThe PLI was well intentioned. But there are a couple of things in hindsight where you can say that there is some learning. Even companies that had PLI had challenges outside their control. Their projected capacities have not appeared,\u201d Gourineni says, adding that \u201ca fundamentally different approach has to be taken.\u201d<\/p> Under a PLI scheme, companies must first deploy capital and absorb all execution risks before getting financial benefits. \u201cIf a project burns through all that capital and is not able to succeed, no PLI would come,\u201d says Gourineni.<\/p> Drawing a comparison with the India Semiconductor Mission, where capital subsidy is given, Gourineni says the government is underwriting a lot of the risk through the execution of the project. \u201cIf we have to look at different ways to incentivise cell manufacturing, there needs to be a way that the government also takes some of the risk during the execution of the project,\u201d he says.<\/p> Unlike Amara Raja, being part of the Tata group gives Agratas several strategic advantages as it scales its business. Tata\u2019s passenger vehicle and commercial vehicle businesses will be its anchor customers.<\/p> \u201cTogether, these strengths enable Agratas to accelerate execution, enhance resilience, and help build an integrated mobility and energy ecosystem,\u201d says Manohar.<\/p> Agratas\u2019 20 GWh cell unit in Gujarat\u2019s Sanand is expected to start production in 2027.<\/p> \u00a0<\/p> No customers<\/strong><\/p> Developing a domestic ecosystem for upstream materials such as cathode and anode is turning out to be a chicken-and-egg situation as raw material producers await cell manufacturing to start.<\/p> \u201cMy customers are struggling because they don\u2019t have their own technology and are getting bits and pieces. Increasingly, Chinese are restricting partnerships for technology. They don\u2019t want to give anything. Across anode, cathode and cell, the Chinese government is not allowing partnerships with Indian companies,\u201d says Vikram Handa, founder and managing director of Epsilon Advanced Materials.<\/p> Manohar says the greatest challenge arises when moving from promising laboratory results to reliable industrial-scale production during which safety, consistency, degradation control and cycle life are the key to success. \u201cThe toughest manufacturing challenge in battery cell production is achieving consistent yield at scale. Due to the extremely precision-intensive process, every step must be tightly controlled. Small deviations can quickly translate into defects, safety concerns and lower yields,\u201d says Manohar.<\/p> For the Indian climate, the ideal chemistry is LFP because of lower overheating risk. \u201cThe challenge remains in technology. LFP today is only concentrated in China,\u201d says Handa. LFP also reduces the country\u2019s dependence on nickel and cobalt.<\/p> \u201cTechnology know-how is lacking. You can buy equipment from Japan and Korea with longer lead time. From China, it was available off the shelf. It\u2019s a solvable problem. What\u2019s not a solvable problem is how to run the factory, how to make a good cell,\u201d says Handa.<\/p> India\u2019s EV ambitions are vulnerable, says Handa. \u201cGraphite is one thing that is totally China-centric. Tomorrow, if they say no graphite for the rest of the world, it\u2019s not like I can pay $1 more and buy it from other countries. It\u2019s just not available. Its processing technology and capacity don\u2019t exist. If I was putting `4,000-5,000 crore into building a gigafactory in India, I would ensure multiple sources for the material that is most concentrated in China. I can buy lithium from five different places, only the price varies This is something for which I don\u2019t have sources,\u201d he says.<\/p> According to the International Energy Agency (IEA), China has also established a near monopoly on battery components production, supplying almost 85% of cathode active materials, including NMC (Nickel, Manganese, Cobalt) and LFP chemistries, and over 90% of anode active material production, predominantly graphite.<\/p> Cell manufacturers have to keep costs low for automakers and ESS (energy storage system) players. India-made cells are expected to be 25-30% costlier than China. \u201cIf cell makers buy everything from China at the cheapest price that they get and not buy anything locally, they are still 25% more expensive than a Chinese cell,\u201d says Handa.<\/p> Without Indian customers, Epsilon is targeting 80% sales from exports to the United States. In the short term, the US is the real market because of energy storage and data centres. Korean giants like LG and Samsung have also set up cell manufacturing capacity in the US.<\/p> Epsilon currently makes graphite anode in India at its 2,000-tonne plant, which can cater to 2 GWh of cell capacity. It is looking to scale it up to 30,000 tonnes by mid-2028. \u201cEven by that time, India will not be producing 30 GW of cells, so we will export a lot of it to customers in the US,\u201d says Handa.<\/p> The company has also started a pilot line for cathode in Germany. \u201cWe are looking to build a 30,000-tonne plant in Karnataka. That will break ground before the end of the year and commission by early 2028. The 30,000 tonnes of cathode that we plan to make will cater to 15 GWh of cell making. For that, we will require 5,000 tonnes of lithium carbonate,\u201d says Handa, adding that Epsilon will source lithium from China, Australia and South America.<\/p> Recycling to the rescue<\/strong><\/p> Battery recycling can reduce India\u2019s dependence on critical minerals in a meaningful manner. In base metals such as aluminum, copper and iron, anywhere between 30% and 50% of the production comes from recycled materials, says Lohum CEO Rajat Verma. Over the long term, anywhere between 30% and 50% production of critical minerals will come via recycling in the country, he says.<\/p> It\u2019s already being seen in the lead-acid battery industry where most of the lead that is required for manufacturing comes from recycling, says Amara Raja\u2019s Gourineni. \u201cRecycling is dominating that value chain.\u201d<\/p> Recycling can eventually provide a meaningful supply of critical minerals like lithium, nickel, cobalt and rare earths. \u201cFor a metal like cobalt, we can meet 60% demand from recycling. For metals like lithium carbonate, it is 70%, and for rare earths, 75%,\u201d says Nitin Gupta, co-founder and CEO of battery recycler Attero.<\/p> According to NITI Aayog, India will have 92,000 tonnes of end-of-life lithium-ion battery from mobility, ESS, consumer electronics and production scrap by 2030.<\/p> The battery recycling market will be $10 billion by 2030, says Attero\u2019s Gupta. \u201cEven today, globally, 80% of batteries coming back for recycling are from production waste, where these batteries are manufactured. Every gigafactory globally has 10% to 25% of capacity as production waste,\u201d he says.<\/p> Under the government\u2019s `7,280 crore Rare Earth Permanent Magnet scheme, both Attero and Lohum have plans to get into magnet production as demand for rare earth magnets is projected to double from 4,000 tonnes in 2025 to 8,000 tonnes by 2030. Unlike lithium, where India is entirely dependent on imports, the country has reserves of rare earths. State-owned IREL (India) Ltd, the sole domestic producer of rare earth magnets, runs an extraction plant in Odisha and a refining unit at Aluva in Kerala. Another state-run firm KABIL (Khanij Bidesh India Ltd) has secured five lithium blocks in Argentina.<\/p> \u201cIndia can break China\u2019s hegemony globally by becoming a big battery recycling market,\u201d adds Gupta.<\/p> \u00a0<\/p> @karandhar<\/p> <\/div> India EV battery manufacturing, lithium-ion cell imports, India China battery dependence, critical minerals India, electric vehicle supply chain, battery cell manufacturing India, Advanced Chemistry Cell PLI, ACC PLI scheme, Ola Cell Technologies, Reliance battery gigafactory, Amara Raja cell manufacturing, Exide lithium-ion batteries,#China #India #break #Chinas #hegemonic #hold #critical #minerals1782425523<\/p> ","protected":false},"excerpt":{"rendered":" After the West Asia war reignited concerns over India\u2019s energy security, Prime Minister Narendra Modi made an appeal to citizens: use electric vehicles more to reduce the country\u2019s fuel import bill. Indian car buyers responded by revving up demand for EVs. Sales of electric cars and scooters hit a record high in the following months. […]<\/p>\n","protected":false},"author":1,"featured_media":10517,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37],"tags":[41851,41850,41854,41849,7650,1654,22909,1198,37118,41848,41855,41856,3920,200,41847,41845,41846,1675,41852,41853],"class_list":["post-10516","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-content-marketing","tag-acc-pli-scheme","tag-advanced-chemistry-cell-pli","tag-amara-raja-cell-manufacturing","tag-battery-cell-manufacturing-india","tag-break","tag-china","tag-chinas","tag-critical","tag-critical-minerals-india","tag-electric-vehicle-supply-chain","tag-exide-lithium-ion-batteries","tag-hegemonic","tag-hold","tag-india","tag-india-china-battery-dependence","tag-india-ev-battery-manufacturing","tag-lithium-ion-cell-imports","tag-minerals","tag-ola-cell-technologies","tag-reliance-battery-gigafactory"],"acf":[],"_links":{"self":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/10516","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10516"}],"version-history":[{"count":0,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/posts\/10516\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=\/wp\/v2\/media\/10517"}],"wp:attachment":[{"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10516"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10516"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/longzhuplatform.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10516"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}